A $700 Billion Peacetime Deficit Is A Catastrophe

Media Credit: Reuters

The national print and broadcast media have made their decision to go all Trump, all Russia, all the time, so some important things that happen domestically don’t receive a lot of attention. For example, the news in late June that 2017 tax revenues are coming in well short of estimates – resulting in an anticipated deficit of $700 billion for this fiscal year – generated little coverage.

Let this sink in for a minute. We are not involved in a hot war anywhere in the world right now; we have more or less full employment; and we have historically low interest rates. Yet we are running a budget deficit that just jumped by nearly $100 billion to $700 billion. But the $100 billion or so shortfall in tax receipts was deemed insignificant in comparison to the news that Donald Trump Jr. took a meeting with a Russian lobbyist last year.

Unfortunately, in 40 years or so – when Donald Trump Jr. occupies the same place in U.S. history as William “Billy Boy” Carter does today – the national debt will be generating a great deal of news coverage. That is because, if it continues on its current trajectory, that debt will essentially swallow us whole.

Lest I be accused of economic alarmism, let me explain. The national debt – the aggregate of all those pesky annual deficits – now stands at $20 trillion, give or take a few hundred billion. Interest on that debt, paid to holders of various U.S. Treasury instruments, will be about $266 billion in 2017.

Read the rest from James O'Brien HERE.

If you like what you see, please "Like" us on Facebook either here or here. Please follow us on Twitter here.